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USA Compression (USAC) Makes No Impact Despite Q3 Narrower Loss

USA Compression Partners' (USAC) DCF available to limited partners of $52 million (providing 1.02X distribution coverage) in Q3 drops 8.6% from the year-ago level.

This story originally appeared on Zacks

The stock of USA Compression Partners, LP USAC has seen no significant change since the firm’s third-quarter 2021 earnings release on Nov 2. Even though this industry player's overall results were tepid with narrower-than-anticipated loss and a top-line miss, its efforts to restrain cost and expenses are appreciative.

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Delving Deeper

USA Compression Partners reported third-quarter 2021 net loss per common unit of 8 cents, narrower than the Zacks Consensus Estimate of a loss of 10 cents, attributable to lower costs and expenses.

However, the loss was wider than the year-ago quarter’s loss per share of 6 cents. This unfavorable comparison was due to lower year-over-year revenue-generating horsepower capacity.

Revenues of $159 million were 1.9% lower than the year-ago quarter’s reading and also missed the Zacks Consensus Estimate of $165 million.

Adjusted EBITDA was down 4.1% to $99.6 million. Moreover, the partnership’s distributable cash flow fell from $56.9 million in the prior-year quarter to $52 million.

The firm reported an operating cash flow of $45.3 million in the quarter, down from $48.2 million generated in the prior-year quarter. Also, its gross operating margin of 69% declined from the year-ago period’s 71.1%.

In the third quarter, the firm’s revenue-generating horsepower capacity decreased 4.2% to 2,914,100 horsepower from the level recorded in the corresponding period of last year.  The average monthly revenue per horsepower was in line with the year-ago quarter’s figure of $16.62. USA Compression Partners’ average quarterly horsepower utilization rate came in at 82.3%, down from 83.9% in the year-ago period.

DCF, Capex & Balance Sheet

USA Compression Partners’ DCF available to limited partners for the third quarter totaled $52 million (providing 1.02X distribution coverage), down 8.6% from the year-ago level. On Oct 14, the firm announced a third-quarter cash distribution of 52.50 cents per unit ($2.10 on an annualized basis).

It spent $13.5 million as growth capex. The partnership’s maintenance capex consisted of $5.3 million.

As of Sep 30, 2021, the firm had $1.96 billion of net long-term debt. Net debt-to-capitalization was 92.6%.


For 2021, USA Compression Partners projects DCF between $200 million and $210 million. It estimates an adjusted EBITDA within $390-$400 million.

Zacks Rank & Key Picks

USA Compression Partners currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the  energy  space are Denbury Inc. DEN, Diamondback Energy, Inc. FANG and APA Corporation APA, each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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